JP Morgan raised IBM’s rating from Neutral to Overweight and lifted its target
price to $291 from $270, citing confidence that software will continue to
accelerate growth. Analysts say IBM has spent the past decade repositioning
toward hybrid cloud and AI with a software-led platform; software now accounts
for roughly 45% of revenue but about two-thirds of consolidated profit. JP
Morgan highlighted software’s higher margins, scalable revenue recognition,
stronger cash conversion and higher-quality earnings as justification for a
higher valuation multiple and called the company’s shift into software a
positive for the stock.
